Does sustainability in executive remuneration matter? The moderating effect of Italian firms’ corporate governance characteristics

IF 3.5 Q1 BUSINESS, FINANCE

Meditari Accountancy Research Pub Date : 2023-01-27 DOI:10.1108/medar-05-2022-1694

Alex Almici

{"title":"Does sustainability in executive remuneration matter? The moderating effect of Italian firms’ corporate governance characteristics","authors":"Alex Almici","doi":"10.1108/medar-05-2022-1694","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThis paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance characteristics enhance the relationship between sustainability compensation and firms’ non-financial performance and to expand the domain of the impact of sustainability on non-financial performance.\n\n\nDesign/methodology/approach\nThis analysis is based on a sample of companies listed on the Milan Italian Stock Exchange from the Financial Times Milan Stock Exchange Index over the 2016–2020 period. Regression analysis was used by using data retrieved from the Refinitiv Eikon database and the sample firms’ remuneration reports.\n\n\nFindings\nThe findings of this paper show that embedding sustainability in executive compensation positively affects firms’ non-financial performance. The results of this paper also reveal that specific corporate governance features can improve the impact of sustainability on non-financial performance.\n\n\nResearch limitations/implications\nThis analysis is limited to Italian firms included in the Financial Times Milan Stock Exchange Index; however, the findings are highly significant.\n\n\nPractical implications\nThe findings provide regulators with useful insights for considering the integration of sustainability goals into executive remuneration. Another implication is that policymakers should require – at least – listed firms to fulfil specific corporate governance structural requirements. Finally, the findings can provide investors and financial analysts with a greater awareness of the role played by executive remuneration in the long-term value-creation process.\n\n\nOriginality/value\nThis paper contributes to addressing the relationship among sustainability, remuneration and non-financial disclosure, drawing on the stakeholder–agency theoretical framework and focusing on Italian firms. This issue has received limited attention with controversial results in the literature.\n","PeriodicalId":18453,"journal":{"name":"Meditari Accountancy Research","volume":"52 1","pages":""},"PeriodicalIF":3.5000,"publicationDate":"2023-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"1","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Meditari Accountancy Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/medar-05-2022-1694","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 1

Abstract

Purpose This paper aims to verify whether the integration of sustainability in executive compensation positively affects firms’ non-financial performance and whether corporate governance characteristics enhance the relationship between sustainability compensation and firms’ non-financial performance and to expand the domain of the impact of sustainability on non-financial performance. Design/methodology/approach This analysis is based on a sample of companies listed on the Milan Italian Stock Exchange from the Financial Times Milan Stock Exchange Index over the 2016–2020 period. Regression analysis was used by using data retrieved from the Refinitiv Eikon database and the sample firms’ remuneration reports. Findings The findings of this paper show that embedding sustainability in executive compensation positively affects firms’ non-financial performance. The results of this paper also reveal that specific corporate governance features can improve the impact of sustainability on non-financial performance. Research limitations/implications This analysis is limited to Italian firms included in the Financial Times Milan Stock Exchange Index; however, the findings are highly significant. Practical implications The findings provide regulators with useful insights for considering the integration of sustainability goals into executive remuneration. Another implication is that policymakers should require – at least – listed firms to fulfil specific corporate governance structural requirements. Finally, the findings can provide investors and financial analysts with a greater awareness of the role played by executive remuneration in the long-term value-creation process. Originality/value This paper contributes to addressing the relationship among sustainability, remuneration and non-financial disclosure, drawing on the stakeholder–agency theoretical framework and focusing on Italian firms. This issue has received limited attention with controversial results in the literature.

查看原文本刊更多论文

高管薪酬的可持续性是否重要?意大利公司治理特征的调节效应

本文旨在验证高管薪酬中可持续性的整合是否正向影响公司的非财务绩效，以及公司治理特征是否增强了可持续性薪酬与公司非财务绩效之间的关系，并拓展可持续性对非财务绩效影响的研究领域。本分析基于2016-2020年期间英国《金融时报》米兰证券交易所指数中在米兰意大利证券交易所上市的公司样本。使用从Refinitiv Eikon数据库和样本公司薪酬报告中检索的数据进行回归分析。研究结果表明，在高管薪酬中嵌入可持续性对公司的非财务绩效有积极影响。本文的研究结果还表明，特定的公司治理特征可以提高可持续性对非财务绩效的影响。研究限制/影响本分析仅限于金融时报米兰证券交易所指数中的意大利公司;然而，这些发现意义重大。实际意义研究结果为监管机构考虑将可持续发展目标纳入高管薪酬提供了有用的见解。另一个含义是，政策制定者至少应该要求上市公司满足特定的公司治理结构要求。最后，研究结果可以使投资者和金融分析师更好地认识到高管薪酬在长期价值创造过程中所起的作用。本文利用利益相关者-代理理论框架，以意大利公司为研究对象，探讨了可持续性、薪酬和非财务披露之间的关系。这个问题受到的关注有限，在文献中有争议的结果。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Meditari Accountancy Research BUSINESS, FINANCE-

CiteScore

7.80

自引率

14.30%

发文量

期刊介绍： Meditari Accountancy Research (MEDAR). MEDAR takes its name from the Latin for constantly pondering, suggesting a journey towards a better understanding of accountancy related matters through research. Innovative and interdisciplinary approaches are encouraged. The journal is a double blind refereed publication that welcomes manuscripts using diverse research methods that address a wide range of accountancy related topics, where the terms accountancy and accounting are interpreted broadly. Manuscripts should be theoretically underpinned. Topics may include, but are not limited to: Auditing, Financial reporting, Impact of accounting on organizations, Impact of accounting on capital markets, Impact of accounting on individuals, Management accounting, Public sector accounting, Regulation of the profession, Risk management, Social and environmental disclosure, Impact of taxation on society, Accounting education, Accounting ethics.